Capital intensity remains a primary constraint on liquidity, as evidenced by capital expenditures consuming up to 8.0% of revenue and contributing to erratic free cash flow outcomes like the -$70.6M outflow in 2024Q1.
| Metric | TTM | Dec'25 | Dec'24 | Dec'23 | Dec'22 | Dec'21 | Dec'20 | Dec'19 | Dec'18 | Dec'17 | Dec'16 | Dec'15 | Dec'14 | Dec'13 | Dec'12 | Dec'11 | Dec'10 | Dec'09 | Dec'08 |
|---|
| Cash from Operations | 306.6M | 296.34M | 266.85M | 381.96M | 345.44M | 258.04M | 15.97M | 223.48M | 179.73M | 255.17M | 164.19M | 112.69M | 193.09M | 217.01M | 230.11M | 261.62M | 263.88M | 148.02M | 198.36M |
| Operating CF Margin % | - | 6.33% | 5.97% | 8.82% | 9.55% | 9.7% | 0.8% | 7.55% | 5.83% | 7.69% | 5.61% | 3.69% | 5.29% | 5.38% | 6.06% | 7.15% | 8.74% | 5.55% | 7.61% |
| Operating CF Growth % | 246.57% | 11.05% | -30.14% | 10.57% | 33.87% | 1516.21% | -92.86% | 24.34% | -29.56% | 55.41% | 45.7% | -41.64% | -11.02% | -5.69% | -12.04% | -0.85% | 78.27% | -25.38% | - |
| Net Income | 234.33M | 212.12M | 148.76M | 181.27M | 140.34M | 45.49M | -149.45M | 79.9M | 36.85M | 129.17M | 78.81M | -51.63M | -109.33M | 53.85M | 114.33M | 115.53M | 106.02M | 80.02M | 103.04M |
| Depreciation & Amortization | 205.22M | 197.26M | 177.35M | 149.27M | 119.78M | 120.39M | 126.85M | 123.22M | 105.8M | 99.38M | 92.97M | 110.72M | 116.81M | 114.86M | 92.33M | 71.82M | 63.22M | 56.3M | 49.5M |
| Stock-Based Compensation | 253K | 0 | 953K | 14.34M | 6.09M | 758K | 1.36M | 4.06M | 2.64M | 4.22M | 3.56M | 4.08M | 9.25M | 7.03M | 1.26M | 0 | 0 | 0 | 0 |
| Deferred Taxes | -4.21M | -4.85M | -11.39M | -4.31M | -15.45M | -16.07M | 471K | -7.97M | 648K | 1.73M | 5.5M | -9.06M | 7.42M | 9.11M | 14.23M | -2.88M | -61.1M | -49.83M | 0 |
| Other Non-Cash Items | 35.83M | 21.43M | 11.48M | 18.78M | 10.36M | 14.91M | 43.52M | -1.81M | 12.36M | -44.4M | -72.87M | 42M | 126.55M | 55.98M | 24.14M | 155.8M | 37.76M | -12.13M | 19.85M |
| Working Capital Changes | -128.69M | -129.61M | -60.31M | 22.62M | 84.32M | 92.56M | -6.78M | 26.09M | 21.44M | 65.08M | 56.22M | 16.58M | 42.39M | -23.82M | -16.18M | 8.13M | 58.66M | 22.45M | 25.98M |
| Change in Receivables | 0 | -73.88M | -11.34M | -61.24M | -56.79M | -4.69M | -13.21M | 5.14M | 12.53M | 19.42M | -9.06M | 36.04M | 4.83M | -27.73M | -66.62M | -10.31M | 41.26M | -1.84M | 14.14M |
| Change in Inventory | 0 | -9.29M | -4.25M | 4.83M | -33.17M | -38.66M | -25.03M | -21.8M | -12.07M | -53.47M | 26.76M | -45.9M | 53.08M | -102.36M | 14.63M | -42.41M | -39.74M | 20.82M | 0 |
| Change in Payables | 0 | 15.56M | 24.46M | 70M | 111.96M | 78.2M | -23.99M | 39.43M | 16.56M | 102.66M | 35.81M | 25.02M | -16.13M | 96.96M | 22.57M | 54.5M | 48.06M | 3.6M | 23.14M |
| Cash from Investing | -184.07M | -335.03M | -280.33M | -380.35M | -259.65M | -108.28M | -88.71M | -260.99M | -163.78M | -124.48M | 23.02M | -60.12M | -168.96M | -310.65M | -306.42M | -320.13M | -178.22M | -96.37M | -152.17M |
| Capital Expenditures | -251.84M | -281.35M | -327.64M | -360.1M | -217.12M | -115M | -86.31M | -265.24M | -197.04M | -174.77M | -92.28M | -90.96M | -169.81M | -313.46M | -294.48M | -319.86M | -175.67M | -90.11M | -148.89M |
| CapEx % of Revenue | 5.23% | 6.01% | 7.33% | 8.31% | 6% | 4.32% | 4.35% | 8.96% | 6.39% | 5.26% | 3.15% | 2.98% | 4.65% | 7.77% | 7.75% | 8.74% | 5.82% | 3.38% | 5.71% |
| Acquisitions | -7.63M | -4.49M | -6.08M | -2.08M | -4.8M | -185K | -3.83M | 2.16M | 10.16M | 9.54M | 25.09M | 2.77M | 1.11M | 6.13M | -6M | -5.99M | -504K | -11.06M | -13.77M |
| Investments | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - |
| Other Investing | 12.2M | -3.69M | 7.27M | 1.81M | 3.35M | 6.91M | 1.44M | 2.08M | 620K | -1.65M | 90.21M | 28.08M | -264K | -3.32M | -5.94M | 5.72M | -2.05M | 4.8M | 10.5M |
| Cash from Financing | -287.88M | 288.75M | -37.16M | -11.82M | -59.98M | -17.93M | 126.01M | -29.63M | -73.44M | -3.35M | -113M | -42.26M | 1.18M | 102.3M | 90.65M | 35.67M | -51.29M | 24.37M | -14.81M |
| Debt Issued (Net) | -267.97M | 345.3M | 33.67M | 5.64M | -21.43M | -37.17M | 140.61M | 13.16M | 0 | 46.6M | -94.69M | -40.75M | 59.56M | 158.63M | 152.57M | 92.23M | 3.81M | 443.57M | 14.29M |
| Equity Issued (Net) | 0 | 0 | 0 | 0 | 337.95M | 0 | 0 | -13.96M | -46.03M | 0 | 0 | 0 | 0 | 0 | 0 | 152.28M | 0 | 0 | 0 |
| Dividends Paid | -35.39M | -50.56M | -50.56M | -40.02M | -31.59M | -21K | -10.22M | -22.43M | -20.94M | 0 | 0 | -12.51M | -50.04M | -37.53M | -50.04M | -56.63M | 0 | 0 | 0 |
| Share Repurchases | 0 | 0 | 0 | 0 | -12.01M | 0 | 0 | -13.96M | -46.03M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | -33.4M | 0 | 0 |
| Other Financing | 15.48M | -5.98M | -20.27M | 22.56M | -344.92M | 19.26M | -4.38M | -6.4M | -6.47M | -49.96M | -18.3M | 11M | -8.34M | -18.8M | -11.89M | -152.21M | -21.69M | -419.2M | -29.09M |
| Net Change in Cash | -148.98M | 238.37M | -61.6M | -70.28M | -11.89M | 112.84M | 44.11M | -75.4M | -111.21M | 113.69M | 82.28M | -26.51M | -36.62M | -9.2M | 8.55M | -31.8M | 40.12M | 61.99M | 0 |
| Free Cash Flow | 54.76M | 14.99M | -60.79M | 21.87M | 128.32M | 143.04M | -70.34M | -41.75M | -17.31M | 80.4M | 71.91M | 21.73M | 23.28M | -96.45M | -64.36M | -58.23M | 88.21M | 57.92M | 49.47M |
| FCF Margin % | 1.14% | 0.32% | -1.36% | 0.5% | 3.55% | 5.38% | -3.55% | -1.41% | -0.56% | 2.42% | 2.46% | 0.71% | 0.64% | -2.39% | -1.7% | -1.59% | 2.92% | 2.17% | 1.9% |
| FCF Growth % | 204.44% | 124.67% | -377.98% | -82.96% | -10.29% | 303.35% | -68.47% | -141.21% | -121.53% | 11.82% | 230.99% | -6.67% | 124.14% | -49.85% | -10.53% | -166.02% | 52.3% | 17.08% | - |
| FCF per Share | 0.26 | 0.07 | -0.29 | 0.10 | 0.61 | 0.68 | -0.34 | -0.20 | -0.08 | 0.37 | 0.33 | 0.10 | 0.11 | -0.45 | -0.30 | -0.26 | 0.41 | 0.27 | 0.23 |
| FCF Conversion (FCF/Net Income) | 0.23x | 1.40x | 1.79x | 2.11x | 2.46x | 5.67x | -0.11x | 2.80x | 4.88x | 1.98x | 2.08x | -2.18x | -1.77x | 4.03x | 2.01x | 2.26x | 2.49x | 1.85x | 1.93x |
| Interest Paid | 62.81M | 0 | 52M | 47.51M | 56.37M | 52.58M | 57.07M | 52.46M | 55.4M | 53.21M | 76.61M | 64.23M | 71.37M | 61.77M | 55.35M | 46.02M | 42.03M | 26.01M | 0 |
| Taxes Paid | 73.22M | 0 | 120.85M | 72.77M | 78.94M | 34.54M | 22.5M | 34.09M | 32.19M | 24.11M | 39.13M | 11.19M | 13.14M | 25.42M | 30.7M | 50.95M | 40.39M | 63.7M | 0 |
MFA Renewal and FX Volatility
Based on reported quarterly filings, the relationship between net income and operating cash flow is highly erratic, with OCF/NI ratios swinging from a low of -0.96 in 2025Q1 to a peak of 4.41 in 2025Q4, indicating significant non-cash adjustments and working capital timing impacts.
The wide variance in the conversion ratio suggests that reported net income is a poor proxy for the company's actual cash-generating capacity in any single quarter. Investors should interpret this as a sign that accruals and regional accounting adjustments, particularly those related to hyperinflationary environments, frequently decouple accounting profit from liquidity.
As reported in financial statements, free cash flow trajectory is inconsistent, with the company alternating between positive and negative FCF quarters, including a notable -$70.6M outflow in 2024Q1 and a $30.4M inflow in 2025Q3, reflecting the heavy capital requirements of the franchise model.
The inability to maintain consistent positive free cash flow suggests that the business model is structurally tethered to ongoing reinvestment mandates. This pattern implies that shareholders may face prolonged periods where cash is consumed by store upgrades rather than returned to investors.
According to recent SEC filings, Arcos Dorados consistently allocates between 3.0% and 8.0% of revenue toward capital expenditures, a trend that appears to be driven by the mandatory 'Experience of the Future' store modernization requirements stipulated within the Master Franchise Agreement.
This high level of capital intensity suggests that the company lacks the flexibility to throttle spending during economic downturns without potentially violating its contractual obligations. The persistent drain on cash flow warrants further investigation into whether these investments are yielding the expected incremental returns on invested capital.
Based on the provided cash flow data, working capital changes are a primary driver of quarterly liquidity fluctuations, evidenced by a significant $105.5M cash outflow in 2025Q3 followed by a $38.6M inflow in 2025Q4, highlighting the volatility inherent in managing regional supply chains.
These sharp reversals in working capital suggest that the company's cash position is highly sensitive to inventory management and the timing of payables across diverse Latin American jurisdictions. Analysts should monitor these swings as they may indicate underlying challenges in balancing operational efficiency with inflationary pressures.
Quick answers to the most common questions about buying ARCO stock.
Arcos Dorados Holdings Inc. (ARCO) generated $296.3M in net cash from operating activities in 2025. This reflects the cash generated directly from core business operations.
Arcos Dorados Holdings Inc. (ARCO) generated $15.0M in free cash flow in 2025. Free cash flow is the cash left over after capital expenditures, which can be used to pay dividends, repurchase shares, or pay down debt.
Arcos Dorados Holdings Inc. (ARCO) spent $281.4M on capital expenditures in 2025. CapEx represents the cash invested in physical assets like property, plant, and equipment to maintain or grow the business.
In 2025, Arcos Dorados Holdings Inc. (ARCO) returned $50.6M to shareholders via cash dividends. This shows the company's commitment to returning capital to its equity investors.